Liquor Control Commission Greenlights Hand Family Purchase of City Beverage

In Beer News by Ryan

On Wednesday, the Illinois Liquor Control Commission gave the thumbs up to Anheuser-Busch’s sale of distributor City Beverage to the Hand Family Companies. The two sides are expected to close on the deal sometime next week effectively ending a years-long saga over the wholesaler.

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The Hand Family is buying Anheuser-Busch’s 30-percent stake in City Beverage, a sale mandated by a new state law that prohibits a brewer from owning a distributor. Much of yesterday’s hearing was focused on vetting the Hand Family and BDT Capital Investments, which owns the other 70-percent of City Beverage. The Hand Family passed muster as did BDT Capital, although the company did concede that a member of the holding company specific to City Beverage — CEO Byron Trott — recently resigned his post on the Board of Directors for Hyatt Hotels Corp to avoid any potential conflicts.

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Also of interest to the commission was what influence, if any, Anheuser-Busch would have in the day-to-day operations at City Beverage. Currently A-B has majority control over the appointment of City Beverage board members and approval of managers. They also have at least partial, if not whole control over buying or selling distribution rights, territories and brands for all four City Beverage locations. Hand Family CEO J.R. Hand assured the commission that A-B would not have its hands in the operation whatsoever and that the new board for City Beverage would be made up of the current three representatives from BDT Capital, J.R. Hand and his father, Charles Hand.

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Once the sale of City Beverage is complete the company will absorb a second distributor, River North Sales and Service. BDT Capital announced it was purchasing River North the same day the deal was announced between the Hand Family and A-B for City Beverage. After the two are combined to form Lakeshore Beverage it will be the largest Bud distributor in Illinois covering everything from the Illinois-Wisconsin state line south to Springfield, or 23-million case equivalents.

photo courtesy @chicagobars

photo courtesy @chicagobars

Moving forward, the Hand Family does have an agreement in place to buy out BDT Capital’s majority interest in City Beverage, if they so choose.

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Also worth noting; J.R. Hand will be running the show here and will split his time between Chicago and the companies wholesalers in Tennessee and Kentucky.

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Ryan

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Equal parts beer nerd and policy geek, Ryan is now the curator of the Guys Drinking Beer cellar. The skills he once used to dig through the annals of state government as a political reporter are now put to use offering unique takes on barrel-aged stouts, years-old barleywines and 10 + year verticals.

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